Professional Documents
Culture Documents
This is to certificate Mr. Shubham Verma has completed Research Project titled
under my guidance.
I hereby, declare that this project report is based on the research work done by me.
This is my Original work and no part thereof has been submitted anywhere else for
Shubham Verma
BBA 6th Semester
1
ACKNOWLEDGEMENT
I would like to pay my sincere thanks to Dr. Abhishek Tripathi head of the
providing me such a marvelous opportunity for doing the project report. This
I pay my heartiest thanks to my project guide Dr. Manoj Mishra & and other faculty
very supporting and helping without him I would not have complete my project
report successfully.
friends & classmates for boosting up my morale at the times of disparity and I am
also thankful for my clients and the people whom I have surveyed ,for their
I would also like to thank all those who directly or indirectly helped me in
the completion of my project work. Last but not the least I thank GOD for being
DATE:
PLACE: Shubham Verma
2
PREFACE
It was a pleasurable experience for me to work on this project report “A study on
sells promotion strategy of PepsiCo production” It has not only helped me to enhance my
knowledge about various strategies followed by the company but also reviewed my
knowledge about training & job opportunities for the management students.
In this project report every possible effort has been made to highlight the major
information.
To make it easier different tabular and diagrammatic approach has been used
which help in understanding the theme. It gives brands, a market image as well as depicts
phase of their life cycle to understand the company value in a better way.
Survey report and secondary data are an important document and contains
information that can be used to find out what are the findings of the research. I have tried
my best to explore the truth in my project reality regarding the survey and understanding
3
4
TABLE OF CONTENTS
CHAPTER-4
RESEARCH OBJECTIVES…………………………………………..60
RESEARCH METHODOLOGY……………………………………..61
PROBLEM DEFINITION
TYPE OF RESEARCH DESIGN
SAMPLE SIZE
SOURCE OF DATA COLLECTION
SAMPALING TECHNIQUES
CHAPTER-5
CHAPTER-6
CORPORATE LEARNING……………………………………………80
LIMITATION…………………………………………………………….81
CONCLUSION ………………………………………………………….82
CHAPTER-7 RECOMONDATION…………………………………………85
CHAPTER-8 BIBILIOGRAPHY…………………………………………….86
5
6
EXECUTIVE SUMMARY
PepsiCo is a world leader in a convenient food and beverages with revenues of more
than $45 billion and more than 1, 60, 000 employees. The company consists of Frito-lay
North America, PepsiCo Beverages North America, PepsiCo International and Quaker
Foods North America. PepsiCo brands are available in nearly 200 countries and
territories and generate sells and the retail level of about $85 billion. PepsiCo is the
beverages.
This project work entitled “A study on sales promotion strategies of PepsiCo products”,
was done to become familiar with the working of PepsiCo (PepsiCo India Holding
Private Limited) and to know the strategies used by PepsiCo in the sales promotion. The
important objectives of the project were to find out: what are the various types of
promotional strategies used in marketing, in which way the strategies are implemented,
what is the market share of the company, which promotional strategy is used most, what
is the impact of sales promotion during off season, how retailers react to new sales
promotions, what are the various tools that the company uses during sales promotion,
The project is entirely based on my observations made during the two months spent at
PepsiCo India Holdings Pvt Ltd, Varanasi and visits to various markets of Varanasi.
Based on my learning and experience, I have made some suggestions to improve the sales
7
Industry Introduction:
Beverage industry is one of the fast growing industries in India .it can be divided into two
sections i.e. carbonated and non-carbonated. The carbonated drinks that can be further
Marketing includes all the activities like promotion, distribution, advertising etc. To
fulfill all the segments of consumers. Marketing is also to convert social needs into
profitable opportunities. So this topic provides all the essentials to theoretical knowledge
with practical knowledge and to inculcate the efficiency. It is also requirement for the
company to improve their service and product quality for achieving their ultimate goal.
As far as the soft drink market is concerned, it is facing the cut throat competition
Single company offers the soft drink to the market in different taste and flavors. In this
More often it becomes impossible to differentiate between the same flavors of two
different brands, when served in plane container, range also. All these factors together
make the situation complicated. Besides both corresponding brands have the similar
price.
8
PepsiCo at a Glance
Type Public
Traded as NYSE:PEP
Website www.pepsico.com
9
10
COMPANY PROFILE
PepsiCo is one of the largest companies there is that is engaged in the food, beverage,
and snack industries. Their address is 700 Anderson Hill Road, Purchase, N.Y. 10577.
Their phone number is 914-253-2000 and their fax number is 914-253-2070. Their stock
symbol is PEP and they are listed on the NYSE. The company URL is
www.pepsico.com.
Business Summary: PepsiCo, Inc. is engaged in the snack food, soft drink, juice, and fast
food franchise businesses. The Company, through its subsidiaries, markets, sells and
concentrates of Pepsi, Mountain Dew and other brands for sale to franchised bottlers in
the United States and international markets and produces, markets, sells and distributes
juices under several Tropicana trademarks in the United States and internationally.
PepsiCo‟s domestic snack food business is conducted by Frito-Lay North America, and
The Company's soft drink business operates as the Pepsi-Cola Company and is comprised
of two business units, Pepsi-Cola North America (PCNA) and Pepsi-Cola International
subsidiary of PepsiCo will merge with The Quaker Oats Company, and Quaker will
foods and beverages. It manufactures and markets Gatorade thirst quencher, along with
hot cereals, pancake syrups, grain-based snacks, cornmeal, hominy grits and value-added
rice products.
11
The proposed merger is subject to certain closing conditions, including approval by
close in the first half of 2001. PepsiCo also operates several food franchises including
Financial Summary: PepsiCo, Inc. manufactures markets and sells soft drinks and
concentrates (Pepsi-Cola, Mountain Dew, Slice, etc.), snack foods (Frito-Lay) and
Tropicana branded juices. For the 12 weeks ended 3/24/01, net sales increased 8% to
$4.54 billion. Net income increased 18% to $498 million. Revenues benefited from
volume gains across all divisions. Net income also reflects an increased gross profit due
12
A Brief History of PepsiCo
Born in the Carolinas in 1898, Pepsi-Cola has a long and rich history. The drink is the
invention of Caleb Bradham (left), a pharmacist and drugstore owner in New Bern, North
Carolina.
The summer of 1898, as usual, was hot and humid in New Bern, North Carolina. So a
spices, juices, and syrups trying to create a refreshing new drink to serve his customers.
He succeeded beyond all expectations because he invented the beverage known around
Caleb Bradham knew that to keep people returning to his pharmacy, he would have to
turn it into a gathering place. He did so by concocting his own special beverage, a soft
drink. His creation, a unique mixture of kola nut extract, vanilla and rareoils, became so
popular his customers named it "Brad's Drink." Caleb decided to rename it "Pepsi-Cola,"
and advertised his new soft drink. People responded, and sales of Pepsi-Cola started to
grow, convincing him that he should form a company to market the new beverage.
In 1902, he launched the Pepsi-Cola Company in the back room of his pharmacy, and
applied to the U.S. Patent Office for a trademark. At first, he mixed the syrup himself and
sold it exclusively through soda fountains. But soon Caleb recognized that a greater
13
The business began to grow, and on June 16, 1903, "Pepsi-Cola" was officially registered
with the U.S. Patent Office. That year, Caleb sold 7,968 gallons of syrup, using the theme
bottle Pepsi to independent investors, whose number grew from just two in 1905, in the
cities of Charlotte and Durham, North Carolina, to 15 the following year, and 40 by
1907.By the end of 1910, there were Pepsi-Cola franchises in 24 states. Pepsi-Cola's first
bottling line resulted from some less-than-sophisticated engineering in the back room of
Caleb's pharmacy. Growth was phenomenal, and in 1909 Caleb erected a headquarters so
spectacular that the town of New Bern pictured it on a postcard. Famous racing car driver
invigorating, a fine bracer before a race." The previous year, Pepsi had been one of the
first companies in the United States to switch from horse-drawn transport to motor
vehicles, and Caleb's business expertise captured widespread attention. He was even
Patriot praised him for his "keen and energetic business sense."
Only two plants remained open. It wasn't until a successful candy manufacturer, Charles
G. Guth, appeared on the scene that the future of Pepsi-Cola was assured. Guth was
president of Loft Incorporated, a large chain of candy stores and soda fountains along the
business relationship with the Coca-Cola Company, and at the same time to add an
attractive drawing card to Loft's soda fountains. He was right. After five owners and 15
14
Milestone of company
1898 Caleb Bradham, a New Bern, North Carolina, pharmacist, renames "Brad's
customers. The new name, Pepsi-Cola, is derived from two of the principal
1902 Bradham applies to the U.S. Patent Office for a trademark for the Pepsi-
Cola name.
1905 A new logo appears, the first change from the original created in 1898.
1906 The logo is redesigned and a new slogan added: "The original pure food
1909 Automobile racing pioneer Barney Oldfield becomes Pepsi's first celebrity
and Healthful" appears, and will be used intermittently over the next two decades.
1920 Pepsi appeals to consumers with, "Drink Pepsi-Cola. It will satisfy you."
1934 Pepsi begins selling a 12-ounce bottle for five cents, the same price charged
15
1938 The trademark is registered in the Soviet Union.
1939 A newspaper cartoon strip, "Pepsi & Pete," introduces the theme "Twice as
1940 Pepsi makes advertising history with the first advertising jingle ever
broadcast nationwide. "Nickel, Nickel" will eventually become a hit record and
1941 In support of America's war effort, Pepsi changes the color of its bottle
crowns to red, white and blue. A Pepsi canteen in Times Square, New York,
operates throughout the war, enabling more than a million families to record
1943 The "Twice as Much" advertising strategy expands to include the theme,
1949 "Why take less when Pepsi's best?" is added to "Twice as Much"
advertising.
1950 "More Bounce to the Ounce" becomes Pepsi's new theme as changing soft
drink economics force Pepsi to raise prices to competitive levels. The logo is
again updated.
1953 Americans become more weight conscious, and a new strategy based on
campaign.
Filling."
16
1958 Pepsi struggles to enhance its brand image. Sometimes referred to as "the
kitchen cola," as a consequence of its long-time positioning as a bargain brand,
Pepsi now identifies itself with young, fashionable consumers with the "Be
Sociable, Have a Pepsi" theme. A distinctive "swirl" bottle replaces Pepsi's earlier
straight-sided bottle.
1959 Soviet Premier Nikita Khrushchev and U.S. Vice-President Richard Nixon
meet in the soon-to-be-famous "kitchen debate" at an international trade fair. The
Sociable."
1961 Pepsi further refines its target audience, recognizing the increasing
importance of the younger, post-war generation. "Now its Pepsi, for those who
recognizes the change, and positions Pepsi as the brand belonging to the new
makes advertising history. It is the first time a product is identified, not so much
17
1964 A new product, Diet Pepsi, is introduced into Pepsi-Cola advertising.
1966 Diet Pepsi's first independent campaign, "Girl watchers," focuses on the
cosmetic benefits of the low-calorie cola. The "Girl watchers" musical theme
becomes a Top 40 hit. Advertising for another new product, Mountain Dew, a
regional brand acquired in 1964, airs for the first time, built around the instantly
1967 When research indicates that consumers place a premium on Pepsi's superior
taste when chilled, "Taste that beats the others cold. Pepsi pours it on" emphasizes
closely to the energetic, youthful, lifestyle imagery established in the initial Pepsi
Generation campaign.
1969 "You've got a lot to live. Pepsi's got a lot to give" marks a shift in Pepsi
Generation advertising strategy. Youth and lifestyle are still the campaign's
contemporary events and mood become integral parts of the advertising's texture.
1973 Pepsi Generation advertising continues to evolve. "Join the Pepsi People,
Feeling' Free" captures the mood of a nation involved in massive social and
political change. It pictures us the way we are-one people, but many personalities.
18
1976 "Have a Pepsi Day" is the Pepsi Generation's upbeat reflection of an
between a very small boy and some even smaller dogs, becomes an instant
commercial classic.
1979 With the end of the '70s comes the end of a national malaise. Patriotism has
are looking to the future with renewed optimism. "Catch that Pepsi Spirit!"
catches the mood and the Pepsi Generation carries it forward into the '80s.
1982 With all the evidence showing that Pepsi's taste is superior, the only
The answer? "Pepsi's got your Taste for Life!" a triumphant celebration of great
1983 The soft drink market grows more competitive, but for Pepsi drinkers, the
battle is won. The time is right and so is their soft drink. It's got to be "Pepsi
Now!"
1984 A new generation has emerged-in the United States, around the world and in
Pepsi advertising, too. "Pepsi. The Choice of a New Generation" announces the
change, and the most popular entertainer of the time, Michael Jackson, stars in the
19
first two commercials of the new campaign. The two spots quickly become "the
1985 Lionel Richie leads a star-studded parade into "New Generation" advertising
followed by pop music icons Tina Turner and Gloria Estefan. Sports heroes Joe
Montana and Dan Marino are part of it, as are film and television stars Teri Garr
and Billy Crystal. Geraldine Ferraro, the first woman nominated to be vice
president of the U.S., stars in a Diet Pepsi spot. And the irrepressible Michael J.
Fox brings a special talent, style and spirit to a series of Pepsi and Diet Pepsi
1987 After an absence of 27 years, Pepsi returns to Times Square, New York,
be "America's Choice."
part "episodic" commercial named "Chase." "Chase" airs during the Grammy
1989 "The Choice of a New Generation" theme expands to categorize Pepsi users
20
1990 Teen stars Fred Savage and Kirk Cameron join the "New Generation"
campaign, and football legend Joe Montana returns in a spot challenging other
celebrities to taste test their colas against Pepsi. Music legend Ray Charles stars in
a new Diet Pepsi campaign, "You got the right one baby."
1991 "You got the Right one Baby" is modified to "You got the Right one Baby,
Uh-Huh!" The "Uh-Huh Girls" join Ray Charles as back-up singers and a
campaign soon to become the most popular advertising in America is on its way.
1993 "Be Young, Have fun, Drink Pepsi" advertising starring basketball superstar
1994 New advertising introducing Diet Pepsi's freshness dating initiative features
Pepsi CEO Craig Weatherup explaining the relationship between freshness and
1995 In a new campaign, the company declares "Nothing else is a Pepsi" and
Source: http://www.pepsico.com/Company/Our-History.html
21
List of tag lines of PepsiCo
1969–1975: "You've got a Lot to Live, and Pepsi's got a Lot to Give"
22
1990–1994: "Yehi hai right choice Baby UH HUH"
2006–2007: "Why You Doggin' Me"/"Taste the one that's forever young"
Source: http://pickprogrammer.net/SLOGAN.aspx
23
Changes in logo of PepsiCo
24
CHAIRMAN AND CEO OF PEPSICO
Indra Nooyi is CEO of PepsiCo; Ranked No.4 on Forbes magazine's annual surveys of
Indra Nooyi is the newly appointed CEO of PepsiCo-the world's second-largest soft drink
maker. She joins the select band of women who head Fortune 500 companies. Presently,
there are only 10 Fortune 500 companies that are run by women, and she is the 11th to
break into the top echelons of power. Prior to becoming CEO, Indra Nooyi was President,
Chief Financial Officer and a member of the Board of Directors of PepsiCo Inc.
she spent her childhood in Chennai. Her father worked at the State Bank of Hyderabad
and her grandfather was a district judge. She did her BSc. in Chemistry from Madras
Christian College and subsequently earned a Master's Degree in Finance and Marketing
from IIM Calcutta. Indra Nooyi also holds a Master's Degree in Public and Private
Management from the Yale School of Management. Before joining PepsiCo in 1994,
Indra Nooyi was Senior Vice President of Strategy and Strategic Marketing for Asea
25
Brown Boveri, and Vice President and Director of Corporate Strategy and Planning at
Motorola. She also had stints at Mettur Beardsell and Johnson & Johnson. At PepsiCo,
Indra Nooyi played key roles in the Tricon spin-off, the purchase of Tropicana, the public
offering of Pepsi Cola bottling group and the merger with Quaker Foods. Indra Nooyi has
been ranked No.4 on Forbes magazine's annual survey of the 100 most powerful women
in the world.
Source: http://en.wikipedia.org/wiki/Indra_Nooyi
MISSON
The main objective of the company is to provide best quality products to its consumer.
Another objective is to provide healthy rewards to its investor, good reward to its
employee and other investor and partners who financially help the company
VISION
26
The vision of the company is to improve in all aspects in which they operate. By
improving in social and economical environment, they want to make tomorrow better
than today.
Source: http://www.pepsico.com/Company/Our-Mission-and-Vision.html
Our Values & Philosophy area reflection of the socially and environmentally responsible
27
What It Means
Sustained Growth is fundamental to motivating and measuring our success. Our quest for
sustained growth stimulates innovation, places a value on results, and helps us understand
whether today's actions will contribute to our future. It is about the growth of people and
company performance. It prioritizes both making a difference and getting things done.
Empowered People means we have the freedom to act and think in ways that we feel will
get the job done, while adhering to processes that ensure proper governance and being
mindful of company needs beyond our own. Responsibility and Trust form the
foundation for healthy growth. We hold ourselves both personally and corporately
accountable for everything we do. We must earn the confidence others place in us as
us, we strengthen that trust by walking the talk and following through on our
Diversity brings new perspectives into the workplace and encourages innovation, as well
Our mutual success depends on mutual respect, inside and outside the company. It requires
people who are capable of working together as part of a team or informal collaboration.
While our company is built on individual excellence, we also recognize the importance and
28
COMMITMENT
Diversity isn't just the right thing to do. It's the right thing to do for our business, and
diversity as a key to our future. Our brands appeal to an extraordinarily diverse array of
To truly understand the needs of our customers and consumers -- and succeed in the
marketplace -- PepsiCo must reflect that diversity in our employees, our suppliers and in
everything we do.
Offering a workplace where diversity is valued helps we build the top-quality workforce
so crucial to our success -- by enabling us to attract and retain great people from a wide
spectrum of backgrounds.
Community
We are committed to celebrating and supporting diversity in our community through our
corporate giving and community programs. PepsiCo gives to the community through
the PepsiCo Foundation, the PepsiCo Community Affairs Department and PepsiCo
divisions. The PepsiCo Foundation and our operating divisions gave grants to more than
29
product, premiums, printing, meeting arrangements, and equipment donations, support of
Customers
We are committed to marketing our products to all groups, treating all customers with
respect, sensitivity and fairness, while providing some of the greatest products on earth.
Early in its history -- as far back as the 1940s -- Pepsi-Cola recognized the importance of
diversity. Pepsi pioneered targeted marketing and national lifestyle advertising featuring
partnered with many groups to create programs that contribute to minority communities.
minority media and interests. Over the years, our success has been recognized with
numerous awards. Most importantly, our products are purchased and enjoyed by all
groups of consumers.
Suppliers:
We are committed to welcoming business partners who represent all people and
purchasing quality products and services from a diverse supplier base. PepsiCo is a
leader in seeking out and working with minority and women suppliers. In 2006, we
surpassed $1 billion in spending with minority and women vendors. It is our policy to
30
promote the utilization of eligible M/WBE vendors in all aspects of the company's
business.
Competitor:
Pepsi cola have a grate competition with other soft drinks and water, but the major
competitor of Pepsi is Coke. Coke gives a direct competition to Pepsi cola. Coke covers
almost 41% of market share and indirectly Pepsi have competition with
Fruit juice and mineral water which capture around 11% market.
SUSTAINABLE ADVANTAGE
31
Making it all work are our extraordinarily talented and dedicated people. When we take
these competitive advantages and invest in them with dollars generated from top-line
growth and cost-saving initiatives, we sustain a value cycle for our shareholders.
Dollars from that top-line growth are strategically reinvested back into new products
and other innovation, along with cost-savings projects.
Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats
Company in 2001
32
Generates direct employment for more than 4000 people in India and indirect
Source: www.allfreeessays.com/essays/Pepsi-And-Its-MarketIng
Internal
S
Things the company does not do well.
W
Conditions in the external environment
External
O that favor strengths.
33
Strengths-
1. Believe on the customer satisfaction.
4. Number one maker of snacks, such as corn chips and potato chips
7. has a big share , popular, well know by costumers, higher celebrities for promotion
Weaknesses-
3- not as popular with older crowd, not associated with key restaurants (i.e. coke /
Opportunities-
34
Threats-
Source: http://www.marketingteacher.com/swot/pepsi-swot.html
35
PEPSICO’S PRODUCTS
36
37
38
Organizational chart
Unit Manager
Customer Executives
Sales Trainees
39
Distribution Channel
“Marketing channels are sets of interdependent organizations involved in the process of
PepsiCo’s Plant
Indenting
Primary
Sale
Distributor
Secondary
Market / Sale
Retailers
Consumer
Distribution Objective
Determine the target segments and the best channels for each segment
& maintenance.
40
MANUFACTURING PROCESS
plant producing 1oo*bacterial free soft water as for specification prescribed by COKE &
PEPSI. The soda sugar making unit is there to prepare sugar syrup, standard mixed
percentage. There is an intermixing unit where through a semi automatic process sugar
syrup. The both flavor water and CO2 is punched together resulting into the soft drinks of
a particular flavor.
There is a huge bottle washing machine where the markets returned bottled are washed
continuously in the super heated water, chlorine and then soft chilled water.
Through the exhausted washing system the bottles are carried out of the washer with the
help conveyer and automatically hundreds of bottles washed and cleaned. Bottles are led
by conveyer to the filling machine unit, where the ready soft drink mixture is put in 800
Simultaneously through an automatic system all the bottle is crowned with the help of
crowning machine. The ready to go the market bottles are then passed through aggressive
inspection and collected into carats (1 carats contains 24 bottles) with the help of
41
After that pet containing soft drinks are sent to the warehouses and immediately the
payment of the excise duty to the Govt. For packed bottle kept in the warehouses are
insured and, ultimate stage of the production line is to dispatch it. The product reaches
42
BOTTLING PLANT IN INDIA
There are total 46 bottling plants across India, in which 35 plants are of soft drinks and 11
43
Introduction to the topic
Introduction:
The importance of consumer sales promotion in the marketing mix of the soft drink
category throughout the world has increased. Companies spend considerable time in
promotional activities. The study here pertains to consumer‟s perceptions regarding sales
promotion. Some past researches have suggested that promotion itself has an effect on the
perceived value of the brand. This is because promotions provide utilitarian benefits such
as monetary savings, added value, increased quality and convenience as well as hedonic
Broadly speaking most of the companies using Marketing Mix which includes…
Price
Product
44
Promotion
These are the four basic pillar of marketing mix. Most of the marketing strategies are
Promotion is one of the important elements of marketing mix. There are so many
Advertising
Direct Marketing
Public Relations
Sales Promotion
Traditionally, sales Promotions have been used by marketer to increase sales in the short
term. However, in the last few decades this communication tool has evolved and now is
considered from a strategic point of view. For this reason, it is necessary to realize new
studies in this area and study how consumers evaluate sales promotions.
Sales promotions have grown in both importance and frequency over the past few
decades. Although an accurate estimate for total sales promotions expenditures does not
Sales promotion serves three essential roles: It informs, persuades and reminds
prospective customers about a company and its products. Even the most useful product or
45
brand will be a failure if no one knows that it is available. As we know, channels of
distribution take more time in creating awareness because a product has to pass through
about the attributes and availability of his products. The second purpose of promotion is
persuasion. The cut throat competition among different products puts tremendous
pressure on their manufacturers and they are compelled to undertake sales promotion
From these elements Sales Promotion is the element which is in the focus of this project.
46
Sales Promotion from the Consumers point of view
Long-term impact
were asked about continuity of purchase of a brand after the withdrawal of promotion.
Majority of the respondents indicated that they would not continue. But some of said
they would. Thus, it could be inferred that promotions in this category (low involvement
products) might encourage trial and brand switching but not long term loyalty.
Preference of Schemes:
Price off was the most preferred type of scheme. Maximum customers‟ ranked price-offs
Perceived Quality:
Majority of respondents had a perception that the quality of the promoted brands
remained the same during promotion, while some of them felt that it was inferior to
before. It can be inferred that promotions were not leading to negative brand quality
perceptions. It is found that some customer strongly preferred to buy their regular brand
and said that sales promotion would not weaken their loyalty towards the brand.
47
Sales promotion from the retailer’s point of view:
It was found that retailer perceived price offs as a better form of sales promotion activity.
Price offs in their opinion had relatively a greater impact compared to any other form of
sales promotion activity like Bonus packs, Premium, Contests etc. Retailers preferred
price offs the most, then bonus pack, premium, contests, in order of importance.
Retailers viewed that the person who came to the shop (who may be a maid, son,
daughter, daughter-in-law and child) was the decider of a toilet soap brand and not the
Income provider (e.g. head of the family). It could be inferred that visibility of
information about the sales promotion activity at the point of purchase could result into
Retailer had relatively very low influence in affecting choice. It could be inferred that
visibility and awareness about the scheme were the critical success factors so that pull
could be created.
48
Perceptions about Response to Sales Promotion Offers
They believed that younger age-groups were more experimental in nature, amenable to
trying new brands, and sought/looked for or asked whether there were any) sales
activities.
Dealer-Retailer Dynamics
At the time of sales promotion activities, dealers had tendency to push unwanted stocks
onto the smaller retailers. In fact these retailers preferred to stock variety of brands and
wanted payment for shelf and window display to increase traffic into their store.
However, supermarkets and big retailers were pampered and given special services and
Margins
It was found that in sales promotion schemes margins varied from 6 to15% depending of
the size of the retail outlet, bargaining power of a retailer, quantity ordered by him etc.
Mostly margins were linked to size of the volumes that were ordered.
49
Nature of POP
Retailers indicated that most of the POP (Point of Purchase) materials were meant for
brand advertisement and not for giving information regarding the schemes. Thus it could
In stock-out situation during the running of the sales promotion schemes, smaller retailers
had to wait for replenishment of stocks till the next scheduled weekly visit by the dealer
salesman but big retailers were serviced on telephonic request for replenishment of
Companies at times were rewarding retailers by giving free gifts like thermos flasks or
clocks if they sold more than certain quantity in a given period. Companies were making
pull and they were more than willing to stock such brands. Hence there was very little
50
Handling Problems
Many a time‟s retailers had to handle various sales promotion offers simultaneously in a
category and also across categories and there was no formal communication planning
either from the dealer or the company. Remembering each offer and handling was a
problem especially for a small retailer which was often an as one-man show.
Source: http://www.nos.org/Secbuscour/24.pdf
51
Why do Sales promotion schemes affect sales?
There are three mechanisms behind these facts. It is Purchase quantity, Brand switching
First, consumer can increase the quantity they buy just because the product is on sale.
Second, consumers are inducing to purchase another brand different from the one they
promotion. However, in the long term this positive effect may be diluted because a
52
Sales Promotion Strategy
Sales are the lifeblood of a business, without sales there would be no business in
the first place; therefore it is very important that if a business wants to succeed, it should
have a sales promotion strategy in mind. The primary objective of a sales promotion is to
Sales promotion is very important as it not only helps to boost sales but it also helps a
business to draw new customers while at the same time retaining older ones. There are a
variety of sales promotional strategies that a business can use to increase their sales,
however it is important that we first understand what a sales promotion strategy actually
A sales promotion strategy is an activity that is designed to help boost the sales of a
product or service. This can be done through an advertising campaign, public relation
activities, a free sampling campaign, a free gift campaign, a trading stamps campaign,
temporary price cuts, and through door-to-door sales, telemarketing, personal sales letters,
and emails.
53
The importance of a sales promotion strategy cannot be underestimated. This is because a
sales promotion strategy is important to a business boosting its sales.
When developing a sales promotion strategy for your business, it is important that you
Other external factors that can influence products availability and pricing
There are three types of sales promotion strategies:
A push strategy
A pull strategy
A Push Strategy:
sell your products and services to the consumer by offering various kinds of promotions
and personal selling efforts. What happens here is that a company promotes their
consumer. The basic objective of this strategy is to persuade retailers, wholesalers and
distributors to carry your brand, give it shelf space, promote it by advertising, and
54
ultimately „push‟ it forward to the consumer. Typical push sales promotion strategies
include; buy-back guarantees, free trials, contests, discounts, and specialty advertising
A Pull Strategy:
A „pull‟ sales promotion strategy focuses more on the consumer instead of the
reseller or distributor. This strategy involves getting the consumer to „pull‟ or purchase
the product/services directly from the company itself. This strategy targets its marketing
efforts directly on the consumers with the hope that it will stimulate interest and demand
for the product. This pull strategy is often used when distributors are reluctant to carry or
distribute a Pepsi product. Typical pull sales promotion strategies include; samples,
coupons, cash refunds or rebates, loyalty programs and rewards, contests, sweepstakes,
and a pull strategy. It focuses both on the distributor as well as the consumers, targeting
both parties directly. It offers consumer incentives side by side with dealer discounts.
55
The Short term Impact of Promotions:
Let‟s have look at the impact of promotions on purchase behavior during the promotional
period i.e. the week or the month when the promotion was being run. The majority of the
empirical studies have focused on the impact of promotions in the short term. The key
There is ample evidence to show that promotions lead to dramatic increases in sales of
promoted brand in the short term. Studies have consistently reported high sales effects
and high price elasticity of brands which are on promotion. The economic rationale for
the promotional response is clear – temporary price cuts increase the value of the product
to the consumer and it leads to immediate action. Sales boost can be quantified on the
basis of brand switching, primary demand expansion and consumer stockpiling during a
promotion.
The sales „bump‟ during the promotional period into sales due to brand switching,
purchase time acceleration and stockpiling. Studies on brand switching have shown that
brand switching effects within a category are asymmetric such that promotions on higher
56
quality brands impacts weaker brands disproportionately. During a promotion, higher
lower quality brands. One explanation advanced for this finding by researchers is that
large share brands have higher brand equity and attract switchers more than low share
brands.
category or buy at an earlier time than usual (purchase acceleration effect). If consumers
buy extra quantity during a promotion or earlier than normal, then they are not in the
market to buy products once the promotion is over. Thus purchase acceleration is
demonstrated through
A lengthening of inter purchase times after a promotion. Purchase acceleration was more
times. Results showed that consumers mostly made up for the large quantity purchased
by waiting longer until purchasing again. Results indicated that heavy users tended to
accelerate purchases more than light users. There was negligible difference in the
57
Sales Promotion leads to primary demand expansion for a category:
While it was traditionally assumed that consumption rates remain fixed during
and after a promotion, but from this project I came to know that promotions also have a
primary demand expansion effect. When a primary demand expansion occurs, promotion
induced increase in purchase quantities does not significantly extend the time till the next
purchase in the category occurs, thus indicating that there has been an increase in
consumption promotions induced consumers to buy more and consume faster. It is found
that promotion induced inventory temporarily increased consumption rates within the
category e.g. in categories such as bacon, salted snacks, soft drinks and yogurt exhibited
product but it also lead to increase in sales of complementary categories. Found strong
cross relationships between products of the promoted product category indicating brand
substitution behavior. They stated that retail price promotions work as a form of implicit
price bundling whereby the consumer surplus is transferred from the promoted item to
non promoted items. Also found that retail price promotions create significant
58
The Long term Impact of Promotions:
Strategies are builds to reap the benefits for longer period of time; same is true in sales
promotion strategies. Let us see impact of promotions effort and study the impact over a
longer time period e.g. 4-6 months or even a few years after a sales promotion campaign.
The result showed that consumer promotions for leading brands of established packaged
products had no after-effects on the brand‟s sales or repeat buying loyalty. The extra sales
of a brand while promoted came virtually all from the brand‟s existing long-term
customer base for which the experience of buying the promoted brand was nothing new.
It is found that although the short term effects of promotions are strong; these promotions
rarely exhibit long term effects. It is observed that each sales component generally lacked
a permanent effect and the effect of promotion was short lived and increase in promotions
affected consumers‟ stockpiling decisions in the long run. They found that the combined
short and long-term elasticity of promotions was zero. The stockpiling induced by a
promotion was essentially offset by reduced demand in the long term. Thus increased
sales were more a result of sales borrowed from the future than increased consumption.
59
Research Objectives of study
60
Research Methodology
2. Research Type:
primary data was studied and analyzed according to the need of the study.
3. Area Selected:
4. Sample unit:
5. Sample Size:
61
6. Collection Of Data:
Some secondary data have also been extracted from the various websites, published
62
ANALYSIS & INTERPRETATION:-
Respondents 35 53 12
Respondents
1-5 years
5-10 years
More than 10 years
INTERPRETATION:-
63
Q.2 which company’s soft drink you would like to purchase in more quantity?
Respondents 56 38 6
Respondents
Others
Brands
coke
Respondents
Pepsi
0 10 20 30 40 50 60
No of respondents
INTERPRETATION:-
The above graph present that 56% of respondents like to buy Pepsi products, 38%
respondents like to buy coke products, and 6% respondents like to buy other product in
more in quantity
64
Q3. Why you want to purchase a particular company’s product in more quantity?
Particular company High Margin More Offers Better supply More facilities
Respondents 41 44 10 5
Respondents
10% 5%
INTERPRETATION:-
From the above data tabulated, it can be inferred that majority of the respondents i.e.,
44% of respondents buy product in more quantity due to more offers. This is followed by
41% due to high margin, 10% due to more facility & 5% of respondents due to better
supply.
65
Q4. Do you suggest customers to purchase a certain brand?
Respondents
40
35
No of respondents
30
25
20 Respondents
15
10
5
0
Yes No Some time
Product suggestion
INTERPRETATION:-
Out of sample size, 38% respondents suggest the customers certain brands while 36%
respondents don‟t suggest and 26% respondents suggest at times.
66
Q5. If Yes why?
Reason for suggestion High margin More Promotional offers Quality Others
Respondents 16 14 3 5
Respondents
High margin
More Promotional offers
Quality
Others
INTERPRETATION:-
Out of respondents who suggest for certain brands to customer in which 16 respondents
suggest due to high margin, 14 respondents due to more promotional offers, 3 of due to
quality & 5 for others reasons
67
Q6. Do you think that customer consider promotional schemes while purchasing a
particular brand of Soft drinks?
a) Yes ( ) b) No ( )
Respondents 82 18
Respondents
Yes
No
INTERPRETATION:-
The above diagram shows that 82% respondents think that customer considers
promotional schemes while purchasing a product & 18% respondents don‟t think so.
68
Q7. Which promotional schemes attract more to customer?
Promotional schemes Price off Extra Quantity Display Promotion Lucky Draw
Respondents 41 39 8 12
Respondents
45
40
35
30
Price off
25
Extra Quantity
20
15 Display Promotion
10 Lucky Draw
5
0
Price off Extra Display Lucky
Quantity Promotion Draw
INTERPRETATION:-
From the above graph it is clear that price off promotional strategy and Extra quantity is
more attractive to customers.
69
Q8. Which of the following promotional schemes you have come across so far?
Respondents 9 52 22 17
Respondents
Lucky Draw
Scratch card
Respondents
Extra Quantity
Mega display
0 10 20 30 40 50 60
INTERPRETATION:-
Out of total respondents, 52% of respondents are currently using extra quantity schemes
followed by 22% for scratch card, 17% for lucky draw and 9% for mega display.
70
Q9. Which medium do you feel is suitable to promote the various promotional
schemes?
Respondents 45 29 15 11
Respondents
Others
Others
News paper
News paper
Sign board
Sign board
Hording
Hording
0 10 20 30 40 50
INTERPRETATION:-
Majority of respondents i.e. 44% feel that the best medium of sales promotion
schemes is hording followed by 29% for sign board, 15% for news paper and 11%
for others.
71
Q10. Is there any existing scheme on the soft drink you are currently using?
a) Yes ( ) b) No ( )
Respondents 62 38
Respondents
38%
Yes
No
62%
INTERPRETATION:-
72
Q11. If yes, please specify?
Extra
Type of schemes Price off schemes Monopoly Others
Respondents 23 25 10 4
Respondents
6%
16%
37% Price off
Extra schemes
Monopoly
Others
41%
INTERPRETATION:
Out of total respondents who are availing existing schemes, 41% use extra schemes
followed by 37% by price off and remaining by others.
73
Q12. If you get an attractive promotional offer in the product other than of your
choice will you switch over?
a) Yes ( ) b) No ( ) c) May be ( )
Respondents 32 49 19
Respondents
50
40
30 Yes
No
20 May Be
10
0
Yes No May Be
INTERPRETATION:-
The above diagram shows that 49% of respondents don‟t change their choice after getting
an attractive offer but 32% of respondents are prone to changing their choice and 19% of
respondents are undecided.
74
Q13. Give reason for the same?
Respondents 15 2 10 5
Respondents
16%
Cost+quantity
47%
Quality
More Benefits
31% Seasonal change
6%
INTERPRETATION:-
Above data indicate that out of the respondents who change their choice, 47% change
due to cost and quantity, 31% due to more benefits, 16% due to seasonal change and 6%
due to quality.
75
Q14. Are you satisfied with schemes given along with products?
a) Yes ( ) b) No ( )
Respondents 39 61
Satisfaction level
39%
Yes
61% No
INTERPRETATION:-
Out of total respondents, 61% of respondents are not satisfied with existing schemes.
76
Q15. Do you want to improve in the service of the company?
a) Yes ( ) b) No ( )
Respondents 72 28
Improvment in services
80
60
No of Yes
40
respondents
No
20
0
Yes No
Responces
INTERPRETATION:-
Majority of respondents want the company to improve its services.
77
Through FAQs
1-The market position of the Pepsi is very strong in area allotted to me. Near about 75%
2-Dew is the most selling brand in the area and at second position is 7UP & third is slice.
3-Retailers are not getting the benefits provided by the company because agency is more
4-When there is any scheme launched by the company, agency sells all the stock to the
5-Whole sellers are selling at low price than Agency because of the stock they bought in
schemes.
6-Acceseries are provided to the big shops only and they should be on the main road.
78
FINDINGS
In the city of Varanasi majority of outlets which keep soft drink products were
doing business from 5 to 10 years and out of them most of outlets prefer to keep
Pepsi product as well as monopoly outlets also are more for Pepsico
Retailers buy products more in quantity because 44% of respondents buy product
in more quantity due to more offers. This is followed by 41% due to high margin,
Majority of respondents i.e. 44% feel that the best medium of sales
promotion schemes is hoarding followed by 29% for sign board, 15% for
Out of total retailers availing existing schemes, 49% don‟t change there choice
after getting an attractive offer but 32% of respondents change their choice and
The retailers and dealers of PepsiCo want PepsiCo to improve its servics and ask
In the form of competitive analysis the market share of Pepsi is greater than coke.
79
CORPORATE LEARNING
To be a part of PepsiCo India Holdings pvt ltd, was the best opportunity
for me to have :
Learn the technical procedure and analysis of various research system such as
80
Limitations of the study
It is well know fact that constraint and limitations are bound to be present in any study do
Due to this, the sample size is only 100, which is not very large.
All the respondents could not fill their questionnaire on their own due to language
Respondent may give biased answer due to some lack of information about other
brands.
Findings of the study are based on the assumption that the respondents have given
correct information.
81
CONCLUSION
Hard work and focus makes people successful, success is nothing but taking right
Overall it was a good exposure at PepsiCo India Holding Pvt Ltd. Before starting
were popping in the mind of a budding manager who had a lot of enthusiasm to
learn the entire functioning of the organization and many of the questions got
There are still few questions unanswered and they are the questions that can be
only answered by the Top Management and are practical questions which can also
I am very lucky that I have done my internship at PepsiCo India Holding Pvt.
Ltd. in marketing department. During internship I got guidance from both sides,
i.e. academic as wall as corporate. Time to time my mentor gave instructions and
The basic purpose of summer internship was to have corporate exposure, to learn
merchandising.
82
To promote sales of Pepsi products (Mountain dew)
My most challenging task was Mega promotion of retail outlets and my target was 3
outlets for mega promotion. It was challenging task because of convincing retailers for
mega promotion & one mega promotion a retailer have to take stocks worth Rs. 50000-150000
Summer Training was like an eye opener. In other words internship is a trailer of
real corporate world. During internship I learnt that punctuality and hard work is
required for sustaining in the market. Apart from this, at the college, the
theoretical concepts were more like dictionary with lots of words but after
Summer Training, the words have their practical use in corporate life. The things
are not exactly done according to the theories in the book, there are certain
My Project gives me the true knowledge of customer relationship concepts and also
83
Advertising policy of Pepsi is better and the company has more focus on
merchandising.
this area.
84
Recommendations
85
BIBLIOGRAPHY
BOOKS REFFERED:
edition) pg 695-671
Britannica Encyclopedia
156-170
INTERNET:
www.google.com
3.30 pm
pm
http://www.pepsico.com/Company/Our-Mission-and-Vision.html access on
02/07/11 at 3:30 pm
86
www.wikipedia.org
NEWS PAPE
The Hindu
Dainik jagaran
Magazine:
Marketing magazine
http://www.marketingmagazine.co.uk/bulletin/dailynews/article/1075878/?DCMP=EMC-
BreakingnewsfromMarketing
87
ANNEXURES
carrying out a survey for our academic project “A study on sales promotions strategies of
PepsiCo Product”. So please fill this questionnaire. Your identity would not be revealed and
Outlet‟s Name:
Outlet‟s Address:
Contact no:
QUESTIONNAIRE:
Q.2 which company‟s soft drink you would like to purchase in more
quantity?
88
Q3. Why you want to purchase a particular company‟s product in more
quantity?
facilities ( )
a) Yes ( ) b) No ( )
d) Others ( )
b) Yes ( ) b) No ( )
draw ( )
89
Q8. Which of the following promotional schemes you have come across so
far?
lucky draw ( )
promotional schemes?
Q10. Is there any existing scheme on the soft drink you are currently using?
a) Yes ( ) b) No ( )
Q12. If you get an attractive promotional offer in the product other than of
a) Yes ( ) b) No ( ) c) May be ( )
90
Q13. Give reason for the same?
( )
Q14. Are you satisfied with schemes given along with products?
a) Yes ( ) b) No ( )
a) Yes ( ) b) No ( )
91